The winners & losers of cheap oil – Bloomberg research

Reuters / Lucy Nicholson
The dramatic 50 percent decline in oil prices which started last summer had a relatively small impact on the global economy with 0.7 percent GDP growth worldwide, the IMF estimates. However, cheap oil has affected major economies differently.

Net oil importers like the US, Europe, and Asia got nearly a $900 billion economic stimulus from cheaper oil prices, while Russia and the Middle East “get stuck with the bill,” Bloomberg reported Thursday. The research was based on a $5 drop in natural gas prices and $50 drop in oil prices as well on imports/exports from 2011 to 2013, excluding the expansion in US oil production.

"I believe we are in an era of lower oil prices in the medium-term and also in the longer-term," Michael Liebreich, founder of Bloomberg New Energy Finance (BNEF), said in a presentation at the group's annual summit on Tuesday. "We have cheap oil, cheap gas, cheap renewables. We are definitely in an age where supply is not constrained."

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Asia definitely gained from falling oil price, turning out the winner with its $300 billion in stimulus, Bloomberg research shows. China as the world’s second-largest net importer of oil benefited from lower prices that supported the government’s efforts to reduce subsidies.

Meanwhile, with both the euro and the overall macroeconomic situation weaker, Europe became the second-biggest winner with almost a $300 billion benefit.

Lower oil prices have also been a net positive for the United States economy, with $180 billion in government revenues. Oil prices delivered GDP growth of 0.4 percent between the third quarter of 2014 and first quarter of 2015. The gross domestic product is expected as well to increase by 0.3-0.6 percent in 2016, according to the IMF data.

Middle East countries have lost the most, around $357 billion since the oil price drop, according to the data from Bloomberg. Saudi Arabia the world's largest oil exporter and OPEC’s most influential member could support global oil prices by cutting back its production. It is trying to maintain market share and expects to keep output unchanged even if oil prices plunged to $20 per barrel. The country claims it has enough reserves to withstand any oil crisis.

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Meanwhile, Russian and Central Asia together have faced a loss of $218 billion since the oil prices started plunging. Russia’s economy is currently recovering from last year’s panic following the slump in oil prices. The Russian currency was closely mirroring oil prices, with the oil benchmark losing 50 percent of its value in the last 6 months of 2014, the ruble lost about 44 percent. Now the ruble is doing better than Brent crude.